Why Having Multiple Credit Cards Is Good For Your Credit

Contrary to popular belief, having more than one credit card is actually beneficial to your credit health. One of the most important factors in determining your credit score is your credit utilization ratio, pictured on the right. In fact, it makes up 30% of your credit score.

The lower your credit utilization ratio, the more of a positive impact it has on your credit score. In order to keep a low credit utilization ratio, the amount of debt that you owe must be significantly smaller than the amount of credit you have available. In general, if you want to have an excellent credit score, we recommend keeping your credit utilization ratio below 30%. Keeping it around 10% is even better.

This is where the benefit of multiple credit cards comes in.

The more credit cards you own, the more available credit you have under your name, making it easier to keep your utilization ratio low. Keep in mind that you can have a high ratio even if you pay your balance in full every month. The credit cards report your current balance (often your statement balance) and available credit to the bureaus each month. So if you only have one card, your balance is $8,000 and your credit limit is $10,000, you’ll have an 80% utilization ratio, even if you pay your balance in full. If you add another card with a $10,000 limit and still spend $8k per month between the two cards, your ratio will go down to 40%, providing a large boost to your credit score.

Apply for credit cards you have a better chance of being approved for.

Every time you apply for a new credit card, a hard inquiry shows up on your credit report. While hard inquiries do have a minor negative effect on your credit score, this negative impact is small and short-term. Compared to the big positive impact of lowering your credit utilization ratio, the effect of hard inquiries is quite miniscule.

When you apply for credit cards, first make sure that you are applying for a card that you have a good chance of being accepted for. While credit cards that require "excellent" credit usually look for credit scores over 700 and often 750, there are great credit cards that just require a "good" credit score, which may be as low as 650. Not only will obtaining one of these credit cards lower your credit utilization ratio and boost your credit score, but a lot of these credit cards also offer stellar rewards.

Here are some of our top choices (if you’re not sure of your credit scores, you can get them for free — as well as a detailed explanation — by signing up for a free trial of one of our top-ranked credit monitoring services.)

Offering 0% for the first 15 months on both purchases and balance transfers, this Chase credit card is just as good or better than most cards targeting those with “excellent” credit, making it our top choice for those with just "good" credit. On top of letting you pay no interest for over one year, it offers great cash back rewards like receiving $100 cash back after spending $500 in the first 3 months. Plus, you will earn cash back on all of your purchases — 5% cash back on purchases in rotating quarterly categories and 1% cash back on everything else. With no annual fee, this credit card is the perfect tool to add to your credit arsenal — boost your credit score and earn cash while doing so.

If your credit is just average (usually considered somewhere between 600 and 680), no worries, the Barclaycard Rewards Mastercard is another great option for boosting your credit score while earning rewards. This credit card offers a 0% APR for the first 6 months on purchases and balance transfers, no annual fee and cash back rewards. You can earn 2 points per $1 spent on gas, grocery and utility purchases, and 1 point per $1 on all other purchases. Plus, you can earn 2,500 points after your first purchase or balance transfer. Because this card is for those with average credit scores, the variable purchase APR does jump to 24.99% after the 6 month introductory period. However, if you're boosting your credit score by lowering your credit utilization ratio with multiple credit cards, you may soon boost your credit score enough to get a credit card in the "good" or "excellent" category. Also, if you use the card to earn rewards and pay back your balance each month, you will not be paying any interest anyways.

If you have excellent credit and being approved isn't a worry, then why not improve your credit score while earning cash? BankAmericard Cash Rewards is our favorite option for cash back cards because you can earn a $100 cash rewards bonus after spending at least $500 in purchases in the first 90 days. Indefinitely, you can earn 1% cash back on purchases, 2% at grocery stores and 3% on gas for the first $1,500 in combined grocery store and gas purchases each quarter. Add in the 0% APR for 12 months on purchases and balance transfers, plus no annual fee, and this card is superb all around.

It's also important to note that a longer credit history reflects better on your credit score. Because of this, new credit users should not open new credit accounts too rapidly. As we mentioned, having more than one credit card lowers your credit utilization ratio and is great for your credit score, but this doesn't mean you should open three credit cards all at once — slow and steady wins the race. To find the perfect credit card for you to boost your credit score, check out our comprehensive credit card reviews and comparisons, and try our personalized credit card chooser.

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Tim CMay 23, 2014

Alec, sounds like you've got a good plan that has established that you pay regularly.

Another thing companies look at is highest balance achieved. If it were me, my next step would be to rotate the use of cards each month, putting all purchases on one individual card each month. Again, when the statement comes out, pay it in full. And for the new month, begin putting purchases on your next card. Repeat this new plan monthly.

This will allow you to demonstrate your ability to handle higher balances and make larger payments on each card. (Just don't go over 30% utilization for that individual card.) It will also still keep each card active within a 12 month period, and best of all…simplify bill paying each month for you, as you will only need to make payment on one card each month!

Cheers! P.S. I've worked in credit authorizations, approvals, and collections. Alec, hope these ideas are helpful for you!

AlecMay 20, 2014

When I hear people who are obviously well-off say they don't need credit, I say, "So what, of course they don't need credit." Unfortunately, the same can't be said for those of us who aren't well-endowed in the wallet department.

$31,524 … that's my total annual gross income (pension & Social Security). Even so, I have 8 credit cards (1 gas card, 1 MasterCard, 2 Discover cards, and 4 VISA cards). None of these are "predatory" cards that charge annual or monthly fees. The gas card has the lowest credit limit – $300. The MasterCard has the highest – $3,500. And I have yet to pay even a penny of interest on any of them.

Every person's approach to credit cards is unique. My ex-wife considered them a means to enhance her lifestyle. That's a big part of why I divorced her. I've always thought of credit cards as serving two purposes.

First, they're a means to an end. My combined utilization rate for all cards hovers around 1%. Every month, I make one charge on each card – something I'd normally buy with a debit card. Then when the statement(s) are released, I pay off the balances in full immediately – not waiting for a "due" date. The very next day, I make another similar charge to each card. And I repeat this process month after month after month. In short, all of my cards are "active" all the time.

This forces my card issuers to report positive info to the credit reporting agencies. If you have nothing but positive notes on your credit record and couple that with a low utilization rate, credit scores have nowhere to go but up. The higher, the better. These high scores allow me to get favorable car insurance premiums. They will also make it easier to obtain loans in the future (car, home, etc.).

My second purpose for credit cards is "life insurance." No, not the kind of asset that relatives fight over after you die (grin). It's a hidden asset I can use in case of an emergency (car repair, etc.). My combined available credit limit is $13,250. A year from now, assuming no emergencies befall me, I plan to apply for even more credit cards … and if I get them, I'll use them just like the cards I have now.

I don't consider this an unreasonable use of credit. It certainly doesn't cost me anything. And who knows, it might help bail me out of a future problem I can't foresee.

BobMay 19, 2014

Stephen, I'm sure your church appreciates your hard earned money, but unfortunately not everybody in the world is as naive as you. Unfortunately many people rely on credit, and don't have the benefit of paying cash for everything. I use my credit cards for everything and pay them off at the end of the month before any finance charges are incurred. So it costs me nothing extra to use a credit card than it does cash, other than the $99 yearly charge for the card. The frequency that I use my credit card, which is one of those super nifty ones that gives you airline miles, I get a free round trip ticket every year in a nice, big, comfy business class seat, which to Europe is around $5,000 or so, a lot better than your tax break! Just because you have made enough to pay everything off, not everybody is in that situation. Even though I do agree that paying interest on credit cards, house payments, car payments, etc, is a waste of money, I would rather pay them than a church! At least the credit card companies employ people, which is a good thing!

As for this discussion, if you have a lot of credit cards that have high limits, then it does help your credit rating, as would just having one with a high limit. If you just stick with the 'only spend what you can afford' scenario, then you should never be in trouble. Sometimes you need a credit card for an emergency, or maybe that spur of the moment vacation. So if you have good credit and want to make it better, you can get a couple more cards, just make sure that it is worth the fee to get the card, and make sure that they don't have yearly membership charges.

EdwardMay 9, 2014

Polina, if credit scores rely on the available credit formula, I don't understand the recommendation regarding multiple cards. is having 10 credit cards with 10,000 in available credit each (combined 100k available credit) any better for my credit score than having 1 credit card with 100,000 available credit. I don't leave a balance on any of my cards, but given the title of your post, I am interested in your reply.

LarkMay 3, 2014

Thank you Polina, for your article, and to everyone who has written such passionate commentary! I love everyone's intensity. I found this site through a link, and I see how this site appears to draw those that really care about managing their money well. I appreciate your myriad opinions and how, even though your strategies vary, the key is that you are all focused on managing your resources as best as you can.

Life is to be lived fully, with love and joy and, yes, responsibility too. My biggest metric in using credit is whether it helps me live more fully or creates more burden, and that depends on many other factors as well.

Going through life's vicissitudes, I've often used credit to pay for things that really matter to me. It's been worthwhile to exchange some extra dollars of interest for education, experiences, and goods that have made a significant difference in my life. I've also valued credit cards for emergencies and unexpected situations.

When my kids were small, my ex and I filed bankruptcy. Several years later, in our divorce, he wanted the house in Indiana and claimed he would pay the mortgage. Only after I had moved to a Arizona, he decided to move himself to Alabama, put renters in the house, and then allowed it to be abandoned when his renters couldn't afford the payments. Of course, this was right during the collapse of the housing bubble, and the house wasn't worth what was owed on it. I didn't have the ability to avoid the foreclosure, and my name was still on the mortgage. In short, I've been through a few financially difficult times, and my credit score has taken a few beatings.

I run a small business that varies in how much profit I make. If I have a particularly low month or season, credit cards have kept me able to continue on an even keel. I always pay my people first, because they are my greatest asset. Other debt comes second.

I also have used credit cards at times to invest in equipment and services that have allowed me to move forward rather than stall out at new opportunities. I've made some mistakes in what I've invested in at times, but I consider this a cost of business that I learn from. I love being in business for myself, and I trust the money spent was a tuition for the lesson learned and the wisdom gained.

One thing I do that keeps me checking in with myself when a choice is before me is to track my spending and credit score. I use an Excel spreadsheet I made for myself years ago and update every time I am paying bills. I've added the math to show me my percent of card utilization on each card as well as my overall utilization. I also track my credit score through Transunion.

I also track the cost of my credit. I pay off the highest interest debt first, and take advantage of rewards and promotions whenever possible.

Through continued focus, my credit score has gradually climbed to a respectable score and continues to improve. I have also become very focused on reducing my debt to zero, as I do recognize that this will only increase my flexibility. Once I've reached that zero though, I will still use my favorite rewards cards (most likely the ones associated with airlines, as I love to travel). Not only do they give me great perks, but many of them include travel insurance, which gives additional peace of mind.

I don't see there is any one right answer that fits all. What matters is that each of us does what helps us live our lives as best we can. Congrats to everyone who is doing that!

With love and appreciation,
Lark

AlecApril 24, 2014

Just a P.S. to my last. During my yearlong credit rebuilding process, I did encounter 3 denials:

2) Sears MasterCard – "credit history too short." That would have been understandable except for one thing. This co-branded card is issued through CitiBank. After their denial, I applied direct to CitiBank for a Diamond Preferred MasterCard. That application was approved instantly with a $3,500 credit limit. Weird.

3) PayPal Extras MasterCard – denied for a most unusual reason, quote, "Unfortunately, your identity could not be confirmed with enough confidence to issue the card." The reason why their denial was unusual is because, during the same timeframe, I applied for a Walmart Discover card and a Texaco/Chevron credit card – both of which were approved instantly with no identity issues in tow. And all three cards are issued by GE Capital Retail Bank. Also weird.

FWIW, I pulled all three credit reports and noticed no potentially fraudulent activity. So, the last two denials remain a mystery to me. If anyone has any opinions on why I was denied, I'd be interested in hearing them.

AlecApril 23, 2014

CJ – I think you and I are on the same wavelength. While I envy those who can "sock away" enough money for a rainy-day fund, it's often easier said than done. In my case, I used to be married to a spendthrift – a woman who seemed to believe that money grew on trees. Worse, she tended to believe that credit was "free money." I divorced her – partly for that reason.

Without airing her dirty laundry, suffice it to say that she and her attorney made some serious legal blunders during the divorce hearings – two of which garnered contempt-of-court citations against her attorney. The judge approved my divorce petition requests as filed – that my assets and liabilities were mine and hers were hers. Even so, when she filed a Chapter 7 bankruptcy afterward, I discovered (to my chagrin) that community property law superseded the judge's court-ordered decision. And, her creditors were all over me like white on rice.

I could handle my own liabilities just fine … but not hers and mine together. Ultimately, to save my financial well-being, I had to file a Chapter 13 in June 2006 – paid as ordered over a five-year period and discharged in June 2011, two months before I retired.

I'm retired now and my total annual income consists of a pension and Social Security ($31,524). In early March 2013, I had no credit whatsoever. So, I decided to start rebuilding my credit by acquiring a secured VISA from my credit union ($1,000 credit limit, backed by a secured deposit). But at the beginning of this month (after 12 on-time monthly payments), they gave my deposit back and converted the VISA to an unsecured card.

My Chapter 13 vanished from my credit file in June 2013 … 7 years from the filing date as required by law. And in December 2013 (with only 9 on-time payments on my secured VISA), I decided to apply for more credit. Between December 2013 and now, I've acquired six more credit cards. I now have three VISA cards, two Discover cards, one MasterCard, and a Texaco/Chevron credit card – with a cumulative credit limit of $11,550. All of these cards are unsecured and none of them are "predatory" cards (with annual and/or monthly fees).

This was planned. When I first started the credit rebuilding process, I realized I was walking on thin ice. My income was enough to sustain me – with enough left over after day to day bills to have a little fun (grin) and put some money away in my Treasury Direct account. But I knew that if I was faced with a genuine financial emergency (ie., an auto breakdown requiring immediate attention), I'd be up the proverbial creek without a paddle. So, I decided to change that situation – to create a credit card "ace in the hole" until such time that the money in my Treasury Direct account exceded the same amount.

But, there was another reason I acquired multiple credit cards. Unless an unforeseen financial emergency changes things, I intend to make at least one charge to each of my seven credit cards monthly … but only for day-to-day things I'd normally pay for with cash or a debit card. And, every month, I'll pay off these small balances in full once the statement is posted (not waiting until a "due date"). This will force all card issuers to report my good graces to the three credit reporting agencies each month. In so doing, and if my total credit utilization remains 10% or less, my credit score has nowhere to go but up. Right now, I have an Experian credit score of 730 (Equifax 725, TransUnion 707). Since I have no intention of applying for new credit (no more hard inquiries), I anticipate that by the end of next year, my credit score should either be in the high 700s or low 800s.

Having a high credit score is crucial if you want to enjoy lower auto insurance premiums. And it's crucial if you want to move into a new apartment where you have to "apply." It's also crucial if you want to apply for a mortgage loan at a favorable rate … something I might do next year. I'm a Vietnam Veteran eligible for a VA home loan (0% down).

If a person is so rich they don't have to contend with these issues, fine – let them do without credit cards. But for the rest of us who aren't so rich, we have to "play the game" to secure our financial survival. If acquiring multiple credit cards is required, so be it.

CJApril 22, 2014

Those who have no credit cards —or are working toward that —may find themselves in deep trouble in an emergency. Years ago, I was at a 3-day out-of-state conference when my transmission died on Friday evening. I ended up having to pay for a new transmission, 4 extra nights at a motel (transmission places were closed on weekends and it took 2 more days to do the work), plus eat at restaurants for 4 days. In addition, I was working for an hourly rate and missed several days of work. Luckily I had a credit card that paid for everything. I usually paid my credit cards in full each month, but the combination of unexpected charges and loss of pay, I chose to pay it off over two months. I hadn't taken my checkbook with me because I figured I couldn't cash an out-of state check anyway and the conference costs had been paid for (conference, room and meals) so I figured I wouldn't need much. I'm not sure what I would have done without a credit card.

As someone else suggested, it is almost impossible to reserve a hotel/motel room or make an airline reservation or buy something online without credit cards. I use several different cards to pay for nearly everything (groceries, gasoline, clothing, utility bills) to earn the most cashback rewards, depending on what I am purchasing. The trick is to buy what you need, not what you want —not purchasing anything you wouldn't purchase if you were paying with cash —and pay the entire balance monthly. (I set up automatic payments for entire balance each month.) Last year, I earned about $600 in cash back, but part way through the year I acquired 2 cards with higher rewards so expect more this year. So I think I am using my cards responsibly, paying no annual fees or finance charges, and earning some extra cash.

There is some controversy over whether or not to pay off a mortgage because one can usually earn more by investing your money than you pay for mortgage interest. However, I had several friends who had religiously paid extra each month toward their principal, so in 2008 when they were laid off, they were paid up several years in advance and didn't lose their homes even when they couldn't make their payments. I also highly recommend never buying a home for what the bank says you can afford. We bought a home for about 60% of what the bank was willing to loan us and a year later my husband was laid off. We were able to pay the mortgage with my salary.

I suggest finding lower interest rates for one's mortgage from time to time, if possible. (I belong to a credit union that offers "loan sales" from time to time with very low mortgage rates and no closing costs.) I always paid more than required so was able to greatly reduce the length of time I made monthly mortgage payments and the total amount paid. While coworkers were buying big-screen TVs with their annual bonuses, I always applied mine to my mortgage principal. Once it was paid off, I invested the amount I had previously paid for my mortgage each month, dividing it between CDs, bonds, and equities.

I've also heard people recommend not saving any money until all debts are paid. That sounds a little crazy to me, because if an emergency arises, then one is forced to pay with a credit card and run up more dept. Each person has to decide how much to pay toward debt and how much to save, but the goal should be to get out of debt AND save in a savings or money market account for emergencies AND invest in a 401k or IRA (or similar) for the long term.

Nicki:"Studies have shown that consumers spend much more when buying with plastic than with cash."
*That is true… but it's also true whether that plastic is a debit or credit card.

Nicki: "McDonalds found this when they started accepting credit cards. Their average ticket price went up 47%. So if you are getting an average of 1-3% back on your credit card but are overspending anywhere from 4 to 47%, do you think you are really coming out ahead?"
*How about this as a solution… if you're eating out a lot, you're probably overspending anyway. Your spending should be in areas where discretion isn't involved as much and you can think more about the purchase such as grocery shopping. Then you're less likely to spend 47% more.

Nicki: "Some hotels and rental agencies will put a hold on a portion of the funds in your checking account, usually equal to a night's stay"
* You paid for a hotel stay? I've spent 5 nights in hotels so far this year, all paid for with points- all things I would have spent money on anyway such as gas, groceries, cell phone bill, etc. Okay, maybe a few trips to Mickey D's, but I usually buy from the value menu wether I pay cash, debit or credit.

Nicki: "The small amount my insurance premiums might be above the rate of someone with GOOD credit pales in comparison to the money I save by not paying interest rates or overspending. Not to mention the incredible peace of mind I have every single day."
* I have peace of mind everyday even with 8 credit cards (and an Amex PRG charge card) in my wallet. I don't pay any interest fees because I pay in full unless I have a card with a 0% interest rate (and even then, I could pay it off- I simply chose not to). My rules? (1) I don't let my debt be any more than 10% of my liquid cash (2) I save 10% of my income. Do that,and thou shalt surely survive with or without credit cards.

The problem isn't credit cards… ask the millions of unbanked people in the US who live paycheck to paycheck who don't have any credit cards. Ask the people who float 5 payday loans and have no credit cards. It's quite simple folks: (1) Earn more than you spend (2) Save/invest as much of your income as you can. Do that, and the question of whether or not you have credit cards is moot..

AnnetteApril 1, 2014

Well,
I think each person is different with different circumstances.

We just purchased a home, and had to use every penny we had for the down
payment. So now we have to use our credit cards for emergencies and other
things like medical etc. We are doing the best we can to keep the balances low, but
we also had to come up with our own supplemental property taxes which leaves us in
a little bit of debt. I am not worried about it because I am paying the debts off one by one
the best I can every month, and as long as I am "working on it" and not spending for things that are not needed, I am not going to worry about it. If it was 10,000.00 I would start to worry. Mine is only 4,000.00, not a big deal. For this first year, I knew we were going to have to supplement certain things with the card due to having to save for the supplemental property taxes. As time goes on, these debts will go away, so I am not worried. It all depends on your attitude about it and your own personal situation. This is only temporary for now, and then it will be back to 30% spending on the card, and paying it off right away.
Take care.

RitaMarch 30, 2014

Ridiculous story there. What happened after? Takke care!

Jo Ann PortellMarch 29, 2014

As someone who has (along with my husband of course, ) dug ourselves out of credit card debt not twice but THREE times over the course of our 39 years of marriage (we finnally figured out after 25 years, we can't spend what we don't make!), I concur with the writers who say no credit cards are better. However, now that my husband is near retirement age, we do have a credit card that makes it much easier to make travel arrangements and see the places we've dreamed about. The difference is we pay the bill when we receive it. When we want to go on a trip (next year it's a cruise to Alaska) we save for it. We figured out what our elected officials haven't….we can't spend what we don't make. Oh, and instead of buying something "New" everytime something breaks, it really is cheaper to fix it rather than replace….that includes cars. We just bought a new car after our 17 year old one died…..13 years of having no car payments was sweet as well as saving that money!

NickiMarch 26, 2014

Folks, I am an independent financial counselor and have heard every excuse in the world for having credit cards. The bottom line is this:
Studies have shown that consumers spend much more when buying with plastic than with cash. McDonalds found this when they started accepting credit cards. Their average ticket price went up 47%. So if you are getting an average of 1-3% back on your credit card but are overspending anywhere from 4 to 47%, do you think you are really coming out ahead?

You can travel, reserve rental cars and hotel rooms, with a debit card. They have the EXACT same protections as a credit card as long as you don't use your pin. Some hotels and rental agencies will put a hold on a portion of the funds in your checking account, usually equal to a night's stay, so make sure when you travel you have plenty of extra cash on hand and in the account, which is wise anyway. Don't travel if you're broke, people.

And increasing your credit score doesn't matter if you stop borrowing money. I do not have a credit score. I paid cash for my 3-year-old car. My conventional mortgage was manually underwritten (no credit score needed) with an interest rate just as low as those with a great credit score. Most private landlords will rent to someone without a credit score. The small amount my insurance premiums might be above the rate of someone with GOOD credit pales in comparison to the money I save by not paying interest rates or overspending. Not to mention the incredible peace of mind I have every single day.

j merlinoMarch 22, 2014

Hearing those people who say no one should have credit cards because of their previous problems with credit cards reminds me of those people who tell everyone that they shouldn't have a drop of alcohol because they were an alcoholic. Hey, just because you drank til you dropped doesn't mean I have a problem with having a beer at a party, and heck… it's even been proven to be heart-healthy.

Yes, a sizable number of people have problems with credit card debt(and I was once one of them), but that simply means they need to learn how to manage their financial affairs properly. Credit cards can be an extremely useful tool in your arsenal- I've gotten over $1000 in rewards in the past 12 months, I haven't paid a dime in interest(you should make sure you don't spend what you don't have, credit cards offer better protection against fraud than debit cards, and it gives me a better way of tracking my spending. The problem isn't credit cards (or debt in general)… it's people who can't learn to spend within their means and aren't disciplined enough to save/invest a portion of their income…

scubasteve5150March 22, 2014

you give 10grand annually to a church so you get a tax savings? wow! i'm trying really hard to remember my non-elective religious upbringing ever teaching me anything about jesus feeding the masses and healing the sick so he could get a tax break from the Roman Empire. but, i guess he did get one hell of a vacation home out of the deal by the time he was all done… hey, knock yourselves out!! :-)

Polina PolishchukMarch 20, 2014

Hi Eric, thanks for your comment. I have not researched this issue in detail, but that definitely sounds like something worth looking into. Thanks for visiting NextAdvisor.

Best,
Polina

Eric HinkleMarch 20, 2014

Polina,

Thank you for your informative articles.

Have you researched the Insurance industry and its use of credit reports to develop an Insurance score?

I have found out, the hard way, that an excellent credit score and history does not result in obtaining the lowest insurance premium rates.

Residents of California and a few other states have banned the use of credit scores, but most of us are penalized for the oddest and most trivial of factors. For example, I was notified that I did not receive the lowest premium rate because I do not have an, "oil," charge card. There are worse examples, but it appears that "reasoning," has been replaced with statistics, in an attempt to save the insurance companies some expense.

Best regards, Eric

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rockyMarch 17, 2014

The formulas for credit scores are proprietary but I think often irrational. In the example above if a person usually runs modest debt each month on cards then does a vacation so he hits $8000 and still pays it off immediately that should be a positive indicator. The person has assets as well as credit, they should consider it sort of like a stress test. My wife does not work but has her credit card autopay so she has great credit. It is not unusual for her to get offers for cards with a $50000 ceiling even though in the last 10 years combined she has not made that much. Assets and income are important and ignored.

JoelMarch 14, 2014

The posted comments are each half correct. I am entering retirement with a paid off house, paid for cars and no monthly debt. It can be done. But credit cards are important to have. First of all, try traveling and making reservations without a card, good luck. Secondly, many things like homeowners insurance check you credit score for when determining your payment and without any credit history you will have a problem. I use my credit cards for routine purchases, mail order, etc but I pay them off every month. I get the rewards, but pay no interest. Best of both worlds. Simply put you have to have financial responsibility and take charge of your money world. If you can't control your cash flow you will ultimately get in trouble. Credit cards are no different from having a wallet full of cash on payday and spending it all before paying your bills. The desire to have it all right now instead of planning and waiting to reach your goals will sink you every time. If you aren't saving for retirement and maintaining a positive cash flow, time to reduce your debt, stop discretionary spending, and get on track to financial security. I know people who won't do it and they have all gotten in way over their heads. Who's fault was that!

dennisMarch 11, 2014

it depends on wha your goals are. if you don't want credit than you should have zero cards. but if you are trying to buy something that cost more than your weekly paycheck than yes it is helpful to have a good credit score . you cannot get to that level without some type of credit.
credit cards are by far the simplest method of generating higher scores

David CunnninghamMarch 10, 2014

Stephen, you have it 100% correct! I am driving my credit score to ZERO. Why, because I am committed to never borrowing another dollar for the rest of my life. At age 45, I only have 2 years left on the house and my days of borrowing are over. Two weeks ago I paid cash for a nice used car. It felt different driving it home knowing there were no payments following behind! Debt(credit cards included) is the thief that steals your ability to become wealthy.

Stephen BowersMarch 7, 2014

THE BEST number of credit cards one should have is zero. In addition, one should pay off one's mortgage and car, as my wife and had done many years ago. It took determination and time, but after four years, we paid our mortgage off 22 years early. The $10,000 we were paying in interest to the bank now goes to our church so we still get our $2,500 back in tax savings! Having no house payment, no car payment . . .no debt . . . Leaves only one option: pay cash and build wealth! Christmas doesn't follow you into next year and vacation doesn't follow you home!

George R Joseph JrMarch 3, 2014

Why Having Multiple Credit Cards Is Good For Your Credit heath hell its not

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About Author

Polina Polishchuk

Polina is a NextAdvisor editor who covers credit report monitoring services, Internet fax, email marketing services and online diet programs, among other consumer and business services. She is a UC Berkeley graduate who currently resides in the San Francisco Bay Area and previously wrote for CNET. When she's not tinkering with online services, she's going to shows, rock climbing or eating sushi.

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